Agencies discuss high cost of imports (Page 55)

Story: Lucy Adoma Yeboah (Thursday, July 24, 2008)
Revenue collecting agencies have complained about the attitude of importers who under-declare the cost of imported items to enable them to pay little tax and increase their profit margin.
They identified the attitude as a contributory factor to the rise in inflation and the high cost of living being experienced in the country.
At a press briefing organised in Accra by the agencies to address the issue of high cost of imported goods, in spite of the low taxes paid by importers, the agencies stated that there was evidence to suggest that some importers under-declared the cost of imported items, for the purposes of taxation, only to sell them exorbitantly on the market.
They said without suggesting price control mechanisms, it was important that the issue was made public for the benefit of consumers and also for the agencies to adopt measures to recover the appropriate taxes due the government.
The briefing, which was attended by officials of the Ministry of Finance and Economic Planning, the Revenue Agencies Governing Board (RAGB), the Customs, Excise and Preventive Service (CEPS) and the Internal Revenue Service (IRS), was devoted to the pricing of imported alcoholic beverages, with the promise that other imported items would be handled in subsequent briefings.
In his presentation, the Commissioner of CEPS, Mr Emmanuel Doku, said routine post-event analyses conducted on imports of alcoholic beverages in November 2007 revealed significant variations in the values used in their clearance.
He said attempts were, therefore, made to get the importers to pay the appropriate duties on the said goods but pointed out that 21 importers who were found culpable were still owing the state more than GH¢1.2 million.
Mr Doku observed that a market survey conducted some months after that exercise indicated that “there is still a yawning gap between export values and the selling prices of those products”.
A table distributed to journalists by CEPS showed a wide margin between the export value, which comprised the amount paid on cost, insurance and freight (CIF), in addition to import duties, and the prices of those items on the market.
Examples are a litre of Glendffidich whiskey, which had the export value of GH¢19.53, out of which GH¢5.74 was paid as duty, but was selling at GH¢63; a litre of Johnnie Walker Black Label: Export value, GH¢19.14, with GH¢5.71 duty payment but selling price of GH¢58; one litre of Courvoirsier VSOP that had an export value of GH¢28.50, with a tax component of GH¢3.84 and being sold at GH¢65, among others.
The table also revealed that the current level of taxation on those items was an improvement on what persisted in 2007.
For his part, the Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu, said pricing had a lot to do with the economy, since it was related to the Consumer Price Index (CPI) and other economic indicators which dealt with the level of inflation within the country.
He made reference to Zimbabwe where because of an abnormal rise in inflation, one billion Zimbabwean dollars could buy only four oranges and urged Ghanaian importers to desist from enjoying at the expense of others while failing to pay the appropriate tax.
The minister reiterated that without any attempt to introduce price control mechanisms, it was important for the right information to be given to consumers, since the impression was created by importers that they were paying too much in taxes.
He agreed that the importers incurred other expenses in order to get the items on to the market but stated that the fact still stood that the margin of profit on those items were too high.
The Executive Secretary of the RAGB, Mr Harry Owusu, hinted that regular checks would be conducted at the markets to identify those importers who defaulted in the payment of taxes to get them to pay.